My Lords, I beg to move that the Bill be now further considered on Report.

Moved accordingly, and, on Question, Motion agreed to.

Clause 92 [Assembly Measures]:

moved Amendment No. 36A:

Page 50, line 37, at end insert ", adopted by resolution of each House of Parliament"

My Lords, in moving Amendment No. 36A I shall also speak to Amendments Nos. 60A, 60B and 60C. All these amendments qualify the decision to adopt a Welsh Assembly measure in the Privy Council by requiring that the measure, prior to the Privy Council decision, is adopted by a resolution in both Houses of Parliament. In order for me to put these amendments in context, it may be helpful to the House if I remind your Lordships of the statutory scheme in Part 3 of the Bill. It is a scheme of breathtaking complexity. I said, earlier, that it was serpentine in conception and labyrinthine in application. If anything, that is an understatement.

The procedure involves a two-stage statutory scheme for devolving power to the Welsh Assembly by a system of Orders in Council. Stage one of the process delegates to the Welsh Assembly, by Order in Council, the power to legislate on certain matters in certain areas that appear in Schedule 5 to the Bill. The second stage, stage two, gives the Welsh Assembly the authority to make what are called Assembly measures, as long as those measures are within the scope of the order passed at stage one.

Rather confusingly, Part 3 of the Bill starts not with the stage one orders, but with the stage two orders; that is to say, the orders that confirm the Assembly measures. It then goes on to consider stage one orders, the devolving orders. This amendment concerns the end of the Part 3 legislative procedure, stage two orders, not the beginning.

I felt it necessary to say that before I turn to the amendment itself. The issue behind the amendments is whether the procedure set out in Part 3 is a subordinate or a primary legislative procedure. If your Lordships were to glance at the proceedings in another place, particularly the speeches made by the right honourable gentleman Mr Hain, you would quickly apprehend that he was extremely concerned to emphasise that this procedure was a subordinate procedure. The Government do not want to admit that, without a referendum, they are delegating primary legislative powers to the Welsh Assembly through the Bill.

The reality, of course, is that it is not a subordinate procedure, though there are certain exceptions to which I shall come in a minute. The provisions in the second stage Order in Council are automatic, following the decision of the Welsh Assembly. That was recognised by the noble Lord, Lord Thomas of Gresford—I see him nodding—in an exchange that I had with him in Committee.

There is a constitutional convention that whenever an Order in Council is to be made in the Privy Council, it is first tabled both in your Lordships' House and in another place for a certain period of time. Sometimes the procedure is the procedure of negative resolution and sometimes it is the procedure of affirmative resolution, but the order is always tabled in draft before it goes to Buckingham Palace. Why is that not the case in this Bill? Why are the Government breaking that constitutional convention for subordinate legislation?

In Committee, in an exchange I had with the noble Lord, Lord Davies of Oldham, who I see is in his place, when I suggested that the parliamentary procedure should be interposed, the Minister said:

"I am saying to the noble Lord that it is a complete denial of devolution to suggest that, after the Assembly—a democratically elected body with its own direct mandate—has had the approval, won through Orders in Council, to use its discretion in a particular area and then takes measures, Parliament should intervene again".—[Hansard, 3/5/06; col. 550.]

In other words, the Government are saying that this is a subordinate procedure, but that for some extraordinary and unarticulated reason the convention in relation to subordinate measures should not apply. The noble Lord, Lord Davies, is using precisely the argument which convinced the noble Lord, Lord Thomas of Gresford, that we are in reality talking about primary legislation.

I have one further observation to make about the noble Lord's intervention at col. 550. Why is Parliament not allowed to interpose itself between the Welsh Assembly measure and the Buckingham Palace procedure, when the Secretary of State is? If the noble Lord, Lord Davies of Oldham, turns to Clause 100, which is entitled Power to intervene in certain cases, he will see that although Parliament is not allowed to have any further say, the Secretary of State is. I apologise for the tedium but it is worth reading out the relevant subsection to your Lordships' House.

Clause 100(1) states:

"This section applies if a proposed Assembly Measure contains provisions which the Secretary of State has reasonable grounds to believe—

(a) would have an adverse effect on any matter which is not specified in Part 1 of Schedule 5,

(b) might have a serious adverse impact on water resources in England, water supply in England or the quality of water in England,

(c) would have an adverse effect on the operation of the law as it applies in England, or

(d) would be incompatible with any international obligation or the interests of defence or national security".

Clause 100(2) says:

"The Secretary of State may make an order prohibiting the Clerk"— that is, the Clerk of the Assembly—

"from submitting the proposed Assembly Measure for approval by her Majesty in Council".

So, in the context of Clause 100, what of the democratic rights of the Welsh Assembly? They can be interfered with by the Secretary of State, but the democratically elected Parliament of the United Kingdom is not to be allowed to have any further say. In my submission, these clauses are complete hypocrisy and should be expunged. I beg to move.

My Lords, I regret that we are unable to support these amendments. The noble Lord referred to my contribution on the second day of Committee and to some of the things that I said, which bore repetition because the noble Lord, Lord Crickhowell, also set out in extenso my views on Part 3. The noble Lord, Lord Crickhowell, referred to the fact that I had said that this was an ingenious and tortuous device to bring in legislation without having a referendum. We accept that that is the position. We also accept, however, that the proposals of the Government, which are not very satisfactory and certainly do not match the aspirations of the Liberal Democrats in Wales or in the United Kingdom, are, nevertheless, a step in the right direction.

This amendment proposes to introduce a further complication by requiring that the measures which the Welsh Assembly has passed, within the powers granted to it by an earlier Order in Council, should require a resolution of each House of Parliament before they can be put into effect. It would also require that each House of Parliament should have a further chance to block the measures that are passed by a democratically elected Welsh Assembly through Clause 101. I repeat that I am not happy with the way in which these proposals have been put forward, and neither was the noble Lord, Lord Richard. I do not know whether the noble Lord, Lord Rowlands, supports them. He was a member of the Richard commission which came forward with a solution that was perfectly satisfactory to us; namely, that the Welsh Assembly should move towards having primary powers and that it should be reconstituted in such a way as to give to the Assembly a mandate for carrying out its policies. I repeat that this is not a satisfactory solution, but the amendments put forward at this stage by the noble Lord, Lord Kingsland, make it even worse. I regret to say that we cannot support it.

Before I leave this subject, I am grateful to the noble Lord, Lord Evans, for handing to us a press release issued today by the Secretary of State for Wales, Peter Hain. He regards our attempts to improve this Bill as "petty mischief-making"—that is the expression he uses—and says that the Lords,

"must stop playing games with the future of Wales and must stop obstructing the Bill".

I think he has lost his marbles. I do not know what concept he has of the constitution of this country or the powers of this House. If we are not here to try to improve this Bill and to bring in amendments to it, we may as well all go home. Mr Peter Hain has no idea of what he is talking about, and if there is any mischief-making going on it is his, presumably to gain some sort of electoral advantage to the Labour Party. It is him who is making allegations which certainly attack the dignity and powers of this House.

My Lords, it is not for me to interpret the words of the Secretary of State in terms of petty mischief-making, but I think a number of us shared a certain irritation yesterday when there was a playing with words. The word "audit", for example, was excised from the Bill and replaced with another word, which causes a whole series of repercussive changes—consequential changes—throughout the Bill. If I can divine the meaning, in a very humble way, of what the Secretary of State was saying in that press release, perhaps he was referring not to some of the other measures that this House passed but to "audit", which seemed to be a rather arbitrary and, in my judgment, very wrong use of the power of this place.

In respect of this amendment and the general question, I think I am with the Government on it, but the Government should give a reply to the concerns raised in the other place by the Father of the House, the right honourable Member for Swansea West. Essentially, he argues that by this device and by not having the additional safeguard of parliamentary endorsement, which is part of this amendment, the Government are moving towards a primary legislative position step by step. To move totally to a primary legislative power for the Welsh Assembly on the lines of the Scottish Parliament would be a major change in the rules of the game and a major change from what the people of Wales only just agreed in the referendum. Only 50 per cent of the electorate in Wales bothered to vote in spite of the Government, after a major election victory, campaigning strongly for it. The result was 25 per cent "for", 25 per cent "against". That was not part of the package put before the people of Wales in the referendum. Nevertheless, one could conceive of a position where the Government, or a future Government, would by a series of small steps avoid the "big bang" of a referendum. That danger has been expressed very eloquently in the other place by the Father of the House and I think it deserves a considered reply. Although I am minded to support the Government, I would be grateful to know how the Government seek to respond to that very genuine concern.

My Lords, I wish to concentrate on what I regard as the basic postulate of the case put forward with such charm and lucidity by the noble Lord, Lord Kingsland. His case—I hope that I do justice to it—is that this is essentially primary legislation that Parliament is not entitled to deal with in the normal way. If he is correct in that, it is a serious charge that deserves to be answered by some change in the whole structure or in some other way. However, with very great respect, I believe that he is wrong. That is not only my personal view—I shall quote from page 65 of the Explanatory Notes. As I understand it, these notes are drawn up in a neutral way by people of considerable expertise and experience who try as best they possibly can to set out an accurate legal position. If they are wrong it would be contrary to the experience of Parliament in relation to the standard of Explanatory Notes. Paragraph 320 states: "This clause"—that is, Clause 92—

"confers on the Assembly the power to make a type of subordinate legislation in relation to Wales".

I quoted that previously in Committee and I went on to quote further the statement later in the same paragraph to the effect that of course the Westminster Parliament still has a parallel right to legislate. I was chided mildly but politely and firmly by the noble Lord, Lord Norton, in an intervention lasting seconds rather than minutes. I do not know whether it was my unnatural shyness or the onset of early arthritis but I did not manage to get my feet in time to intervene. He was entirely wrong to say that that was a flawed argument. I was not at all arguing the point about Westminster's right to legislate; I was relying on the considered, objective, competent opinion of the compilers of the Explanatory Notes. If I am right about that, the case put forward so attractively by the noble Lord, Lord Kingsland, falls.

My Lords, I had not intended to intervene in the debate on this amendment, particularly after this formidable exchange of legal opinion. However, if we are going to have authoritative statements quoted from outside, we should attach some significance to the views of the noble Lord, Lord Richard, who, with the noble Lord, Lord Rowlands, and others studied this matter in great detail. I remind the House that he said of "this device"—that is what he called it—that,

"Westminster can say they have not devolved primary legislative powers, but depending on the way in which the Order in Council procedure is used, it could in effect be a concealed grant of almost a direct legislative competence down to Cardiff".

If it has not got there, it is pretty close to it and we need some elucidation. We also need elucidation for the reasons that the noble Lord, Lord Anderson, raised.

I make two other observations. The first is that I agree with the statements of the noble Lord, Lord Thomas of Gresford, about the press handout. It seems likely that its primary purpose in being issued today was to seek to avoid the Labour Party getting another bloody nose in the Blaenau Gwent by-election. If we are really going to have this House insulted for no other purpose than that, we have got into a pretty shocking state of political play. Secondly, I say to the noble Lord—I shall enlarge on this when we come to later amendments—that I still find his position very hard to understand. Having said that all of this part of the Bill is highly unsatisfactory and that he would much prefer Part 4, he is reluctant to allow a referendum to be held that would allow the people of Wales to say, "Yes, we want to go on" with what the noble Lord, Lord Elystan-Morgan, called in an earlier debate Gladstonian home rule. He wants it, but he is not prepared to ask the people of Wales whether they want it too. However, we shall return to that subject with later amendments.

My Lords, I thank the noble Lord, Lord Thomas, for mentioning my membership of the Richard commission. The commission indeed recommended that there should ultimately be a full transfer of primary powers, but also recognised that there would be a long interim period, not of months but years. It explored the possibilities of enhanced legislative powers being given to the Assembly in that interim period, so that it could exercise them before the possible transfer of primary powers, subject to a referendum and the rest of it.

We did not consider the particular device contained in Part 3; we looked at other forms, like framework legislation. But I find Part 3 satisfying in that it deals with and offers, in this period of whatever length, the opportunity for the Assembly to have enhanced competencies. I therefore support Part 3, and certainly do not support the Opposition's amendment. Frankly, I find it difficult to understand how either House could possibly decide by a vote, affirmative or otherwise, on a measure that it had no part in developing.

My Lords, the noble Lord, Lord Kingsland, said that these were labyrinthine and serpentine proposals. He, at least, has been crystal clear. He has reflected the deep doubts in the Conservative Party about devolution. That is what the amendments reveal: they have reduced the Assembly to the status of a parliamentary committee, every measure passed by the Assembly requiring approval by both Houses of Parliament. As the noble Lord, Lord Thomas, indicated, he may have some doubts about aspects of devolution and the proposals in the Bill, but he can recognise a denial of the concept when he sees it.

Requiring measures to be ratified by Parliament would not just stop the present state of power in Wales; it would be a step backwards. It would place the Assembly under restrictions more stringent than exist in the current settlement. There is little point in a process of controlled devolution to the Assembly if the legislation it passes has to be approved by Parliament before it becomes law.

We should not be surprised at the challenge from the other side because, although we got four different approaches to devolution from the Opposition Benches at Second Reading, there was no security in their position. That has now been revealed as they challenge this Bill in detail. As things stand, the Assembly can make its own secondary legislation without recourse to Parliament. Using framework powers, such as those contained in the NHS Redress Bill—which has been considered and approved by this House—the Assembly can make laws similar in scope to an Assembly measure. There is no ratification requirement, such as that proposed in the amendment, because that Bill becomes an Act of this sovereign Parliament, allowing a framework in which decisions can be taken in Wales.

The noble Lord, Lord Kingsland, seems to find the principle behind that objectionable. I have not heard him or his colleagues object to framework Bills passed by this legislature, but perhaps they are getting round to that. There is no difference between the proposal in the Bill and the framework provisions in a Bill like the NHS Redress Bill: Parliament deciding on the principle and the Assembly deciding on the detail in Wales, on behalf of the Welsh people. The party opposite did not present opposition to the NHS Redress Bill, but approved it.

There are one or two other matters that I think deserve serious consideration in response to this debate. I recognise an old Swansea alliance when I see one because my noble friend Lord Anderson reflected anxieties expressed in the Commons by his erstwhile colleague the Father of the House about conferring primary legislation. That is not the case; what is being sought and provided here is that the provisions for the Assembly should be within the framework of the powers given by the Orders in Council in the first instance. It is then open to the Assembly to present proposals for enhancing its powers but, as noble Lords recognise, that process would take a considerable period of time and be within the framework of this Bill and the 1998 Act, which clearly define the limits of the Assembly's competence.

As for the power of the Secretary of State to intervene on proposed measures before they are approved by the Queen, we are not talking about the Orders in Council, which potentially enable the Assembly to propose measures; we are talking about measures that the Assembly proposes in areas that have been vouchsafed to it by previous Orders in Council. We are then talking about the Secretary of State being able to intervene if, in his judgment, what is being contemplated by the Assembly raises significant and serious issues. That provision obtains in the Scotland Act in relation to the Scottish Parliament, and it was the judgment of this Parliament—of this House and another place—that this reserve power is necessary. That is not the same as saying that we are going back to a parliamentary process of scrutiny because that would be to destroy devolution entirely; it is to say that there may be circumstances in which the Secretary of State reaches a judgment that is different from that of the Assembly in certain areas.

We had an extensive debate yesterday, and we are destined to debate further ramifications later today regarding the crucial issue of the resource of water—we all know there is a particular relationship between the amounts that obtain in Wales and the amounts of which the English nation has always been able to avail itself. Areas such as that have particular significance above and beyond Wales. Therefore, there must be some element of reserve. That is all that is reflected there. So this provision does not suggest full parliamentary scrutiny. It does not mean that; it is a reserved position. But, overall, the Bill creates the opportunity for increased measures of self-governance with regard to Wales, and the noble Lord, Lord Kingsland, despite the extremely attractive manner in which he presented the amendment, is bent on wrecking.

My Lords, I shall be as telegraphic as I can in responding to the various points raised during the debate. First, the Minister suggested that the Opposition are in some way against devolution. The noble Lord knows that to be untrue. We said repeatedly throughout the debates at Second Reading and in Committee that we are for devolution—for Part 4 of the Bill—provided that it is introduced by a referendum. We know why the Government will not hold a referendum in Wales: it is because they know that they would lose it. That is in terms what the Minister said on Report in another place.

The noble Lord, Lord Rowlands, suggested that your Lordships' House and another place should play no further part at stage two, following the decision of the Welsh Assembly to enact a measure, because neither another place nor your Lordships' House had any part in formulating it. I suggest to the noble Lord that that is not a powerful argument. Whenever we have considered a draft statutory instrument, by either the negative or the affirmative procedure, we have had no role in formulating that instrument. That is entirely the task of the department that places it before us. We have had no influence on its content. All we can say is yes or no. I am always extremely attracted by the way in which the noble Lord makes his arguments but, with great respect to him, I do not think that the argument he advances for his cause holds any weight in this context.

My Lords, in most cases, the old traditional statutory instruments of the kind he has described have flown from primary legislation that has been fully subject to debate in both Houses.

My Lords, with great respect to the noble Lord, that makes my case a fortiori. Under our constitution, we have a double lock on all legislation, whether primary or secondary. As the Government insist that we are dealing with secondary legislation here—the noble Lord, Lord Elystan-Morgan, has confirmed that—that is a very good reason for having a double lock in this case. The Minister drew your Lordships' attention to the case of framework legislation. Framework legislation has a double lock. There is the skeleton Bill and all the instruments under it must come to your Lordships' House and another place for confirmation, by either the negative or the affirmative procedure.

This is primary legislation clothed as secondary legislation. The Government should have had the courage to admit that, but they have not; they have chosen the subordinate course. They cannot have it both ways. If they insist that this is subordinate legislation, they must respect the conventions of our constitution and bring these measures to your Lordships' House and another place. I should like to test the opinion of the House.

On Question, Whether the said amendment (No. 36A) shall be agreed to?

Their Lordships divided: Contents, 118; Not-Contents, 178.

Resolved in the negative, and amendment disagreed to accordingly.

moved Amendment No. 36B:

Page 50, line 39, leave out subsection (3).

My Lords, Amendment No. 36B seeks to remove from the Bill Clause 92(3), which states:

"The validity of an Assembly Measure is not affected by any invalidity in the Assembly proceedings leading to its enactment".

I shall also speak to Amendments Nos. 36C, 60D and 72A. Amendment No. 36C refers to Clause 92(4), which states:

"Every Assembly Measure is to be judicially noticed".

We also seek to excise that subsection. The language of Clause 92(4) is, if not in terms then in intent, repeated in Clause 101(4) and Clause 114(7).

One thing established by the exchanges on the previous amendment is that both the Government and we, ourselves, accept that the procedure that we are considering is subordinate. If that is so, what on earth are subsections (3) and (4) of Clause 92 doing in the Bill?

It is true that the same provisions appear in both the Scottish and the Northern Irish devolution Acts—an identical provision to Clause 92(3), for example, appears in Section 28(5) of the Scotland Act 1998 and in Section 5(5) of the Northern Ireland Act 1998. But the nature of the devolution in Northern Ireland and Scotland is quite distinct from the nature of the devolution that we are entertaining in Part 3 of this Bill. It is clear from those Acts that primary legislative powers have been devolved to the Scotland and the Northern Ireland Parliaments and therefore it is appropriate that a provision like Clause 92(3) should appear in that legislation. Exactly the same common law rule applies to our own Parliament.

However, since the Government have now accepted that the legislative process under Part 3 is subordinate, surely subsections (3) and (4) of Clause 92 have no place in the proceedings of the Welsh Assembly. Because subordinate legislation is being determined in relation to a statutory framework decided under Clause 94, procedural defects in the making of that legislation ought to be the basis for judicial intervention, as is true for all subordinate measures. These amendments reflect the logic of the Government's assertion in all our debates so far that this is subordinate legislation. I beg to move.

My Lords, I am obliged to repeat the arguments that I made in Committee. The Government do not believe that the work of the Assembly should be impeded by legal challenges that might be entirely spurious. No legal challenge can be made in respect of things done in Parliament as set out in Article 9 of the Bill of Rights, on which I know that Members of the Opposition are great authorities in this day and age. Further, as the noble Lord conceded, similar provisions to these subsections appear in the Scotland and Northern Ireland Acts, so the principle has been established.

If legal challenges to Assembly measures or Acts were allowed on purely procedural grounds, that could give rise to significant problems in terms of delay and legal certainty. Such challenges could be brought following any technical error in complying with the Assembly's procedures for passing measures, which could lead to problems over whether a proposed measure or Bill subject to such challenge could be approved by Her Majesty, or, if approved, whether the measure or Act would be vulnerable to being struck down by the courts. This would leave the law in a very uncertain position and could be dramatically and disastrously unfair.

Let us look at the process whereby the Clerks put before Her Majesty an eventual measure after the Order in Council has been proposed giving the Assembly the right to pass it. If that measure is passed within the Assembly's competence and goes to Her Majesty to be signed in Council, a challenge could be made on the grounds that the Clerk of the Privy Council or the Assembly had failed in some technical way. Of course we know that those distinguished personages do not make mistakes, and we are grateful for that. But if they did, the whole process would collapse.

My Lords, what would be the remedy if there were to be a major procedural irregularity?

My Lords, we are talking not about major procedural irregularities, but about administrative mistakes. I am talking about technical errors which, if challenged, would be recognised as such. The entire decision of the Order in Council would not be annulled as the result of such minor slips.

My Lords, what if it were a major error?

That is a different matter altogether, my Lords. A major error would mean that the Assembly, in its due scrutiny of the issue, would have made a mistake that the Secretary of State, in examining the measure before he sees it move on to an Order in Council, did not see. I merely make the obvious point: we do not make major mistakes of that kind in legislation. But if we did, there would be legal redress. The law as then enacted would be challengeable in the courts. While of course we would not deny the right of any British citizen to take an issue to court and seek a judgment in his favour if he had been arraigned as the result of a major error, we are talking about technical slips—that is the purpose behind these provisions.

My Lords, does the Minister accept that a devolution issue would be dealt with under Schedule 9? If there were a fundamental flaw in relation to the vires of the Assembly in passing a piece of legislation, it could be challenged either by the Counsel General or the Attorney-General, or it could be referred by the magistrates' court or the High Court in the way set out in that schedule.

My Lords, I am grateful to the noble Lord for pointing out that additional ramification. The whole point of the process is to ensure that there are checks and balances. But let me emphasise that this group of amendments is designed largely not with major issues in mind, to which my noble friend drew attention, but with technical points in mind.

My Lords, the Minister will be extremely concerned to hear that I am satisfied with his reply. His rhetoric was dismissive, but the examples that he gave were very helpful. On that basis, and given the manner in which he has supported the provisions of this clause, I am more than happy to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 36C not moved.]

moved Amendment No. 37:

Page 51, line 2, at end insert ", but such power shall not be exercised without there having first been full consultation with the Assembly"

My Lords, subsection (5) of Clause 92 states:

"This Part does not affect the power of the Parliament of the United Kingdom to make laws for Wales".

My amendment seeks to qualify what is otherwise an absolute authority by stating,

"but such power shall not be exercised without there having first been full consultation with the Assembly".

I appreciate that this suggested amendment will never be carried and that, if it were to be, it would have no effect for the simple reason that the mother Parliament in respect of the Welsh Assembly, Senate or Parliament, whatever we call it, will always have that residual longstop authority.

The reality of this was brought home to me very forcefully some 20 years ago when the dominion of Canada became a republic. The British North America Act 1867 was amended by this House, not by the Canadian Parliament. This House had retained the absolute and ultimate authority in that respect. If Australia ever becomes a republic, it will be for this House to pass the legislation. It follows, therefore, that the ultimate authority will always be here. One may well question the point of suggesting any amelioration of that authority. It is this: there are two sides to the coin; one side could lead to abuse and the other could lead to very considerable practical convenience.

The abuse would arise if the Welsh Assembly passed a measure in a devolved area with which this House was not happy—let us assume for a moment that Part 4 was in operation—and within a month this House passed legislation that was utterly contrary to it, thereby showing its contempt for the very existence, I would argue, of the Welsh Assembly.

The other side of the coin is this. Let us suppose that legislation is needed speedily—for instance, in the realms of housing, roads and education—and that it applies to both Wales and England. If the Welsh Assembly is not geared to deal with that in a matter of days or weeks, as might be necessary, it would be very convenient to allow this House to legislate for both jurisdictions.

This is exactly what happens in Scotland. I understand that at Committee stage in 1998, when the Scottish Bill was going through this House, what is called the Sewel convention—which is named after the noble Lord who, as Minister, was dealing with the Bill—was agreed. This convention in no way creates legislation or any contract—it might be described as an understanding binding in honour only—but it is a very powerful development. Its effect is that the Westminster Parliament has undertaken not to intervene in any Scottish matter unless requested to do so by, and with the consent of, the Scottish Parliament.

I am asking that the Minister should give thought to introducing a formal convention on the lines of the Scottish model, which I think would be amply justified. It is a case not only of endorsing and protecting Welsh rights, but of protecting in the future what one hopes will be a very fulsome and proper relationship between this House and the Welsh Assembly.

My Lords, I am grateful to the noble Lord for giving way. I have been listening to what he has to say with great interest, but I am a little puzzled as to exactly what he is suggesting. The Scottish situation is clearly different. That country has its own legal system and full legislative authority—the Gladstonian home rule of which the noble Lord has spoken. But if, let us say, the Home Office is producing legislation—as it seems likely to and has done so frequently in the past—does the Home Secretary have to consult with the Welsh Assembly about every aspect? As it goes through Parliament and is amended by the House, does he have to go back to the Assembly and seek authority for changes? I am not at all sure. Clearly in the Welsh case there are great areas which are not being devolved and for which the Westminster Parliament is responsible. I am trying to probe the noble Lord as to how far this consultation process is expected to go.

My Lords, I am sure that it is my fault, but I think that the noble Lord, Lord Crickhowell, might have misunderstood the situation. The amendment does not change in any way the demarcation between the Scottish jurisdiction and the Westminster jurisdiction. The Westminster jurisdiction would be there in any event but would be used only at the behest of the Scottish jurisdiction. I understand that it has been used on scores of occasions since 1998. I think that I am right in saying—I shall be corrected if it is not the case—that the crime Act of 2002 made possible rapid seizures of moneys that were the subject of crime or the consequences of crime. If there had been no appropriate Scottish statute, those funds could have been moved across the border very easily. So, rather than going to the trouble of making such an Act, the Scottish Parliament requested this House to do so.

In such circumstances, this measure could be of immense importance to both Houses. It would safeguard what otherwise would be the constitutional monstrosity of this House and the House of Commons, having devolved power, nevertheless reneging on that or derogating from this Parliament. I beg to move.

My Lords, I agree with the intent behind the amendment. The noble Lord, Lord Elystan-Morgan, is quite right to put it forward as a desirable position. However, I would query the case for putting it on the face of the Bill. I think that the issue would be better addressed by a statement from the Dispatch Box.

My Lords, I was not suggesting that it should be on the face of the Bill; I was only using the amendment as a way of raising the matter. It should not be on the face of the Bill. It should be a convention, binding in honour only, the same as in Scotland.

My Lords, I am grateful to the noble Lord because that makes my point. I was going to suggest that it would be better to develop what might be called "Davies motions", which would be analogous to Sewel motions because of a statement from the Dispatch Box. If this was on the face of the Bill, there would be inherent problems in terms of justiciability and what is meant by "full consultation". I am gratified by what the noble Lord has said.

My Lords, there is no doubt that the Sewel convention is working well—indeed, it may be working better than was expected. The only problem with it—this is a complaint from the opposition parties—is that, when a Sewel motion is brought before the Scottish Parliament, Members of the Parliament are not clear whether they are supposed to be debating the issue that they are then going to ask this Parliament to decide on, or whether they are just debating an administrative transfer.

My Lords, amity has broken out on all sides. My only regret is that the noble Lord, Lord Kingsland, has not intervened to say how much he approves of the concept behind the amendment. But I am sure that he silently does.

My Lords, the point that I would have wished to have made has been perfectly articulated by my noble friend Lord Norton of Louth and there is no need whatever for me to say anything.

My Lords, the noble Lord's self-denying ordinance is a lesson to us all.

Obviously the noble Lord, Lord Norton of Louth, has summed up the response that I would otherwise have given to the noble Lord, Lord Elystan-Morgan. There are obvious advantages in consulting on legislation that can be passed by this Parliament. We have indicated that in previous discussions about the Bill. It is clearly the case that, on certain occasions, the interests of Wales could be advanced more adroitly and effectively by legislation passed in this Parliament for the whole of the United Kingdom, of which Wales would be a part, in which case consultation would need to be carried out.

It is not for us to prescribe on the face of the Bill a Sewel-type convention. I think that we should be very careful about the name when we eventually arrive at it—so I am not accepting the suggestion of the noble Lord, Lord Norton—but a process similar to that would be of advantage.

My Lords, I should have made this point earlier. The practical effect of the measure is not so much to curb the mother Parliament—it does not need curbing, because it would not be abused in that way—as to remove all doubt, as far as the Scottish Parliament is concerned, about whether it would be entirely proper for this House and the House of Commons to intervene. Once you have cleared the air by making a formal request under that convention, all doubt is removed. That is the real value of it.

My Lords, I accept that point entirely. I think that the whole House is of one mind about the desirability of this process. I hope that the whole House is also of one mind in agreeing that we would like the noble Lord, having aired the issue, to withdraw his amendment on the basis that we expect to achieve this objective without a legislative format.

My Lords, I shall certainly do that. I am grateful to everyone who has spoken in support of the measure and for the fact that such amity has broken out in all parts of the House. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

My Lords, I remind your Lordships that, if Amendment No. 38 were passed, I could not call Amendment No. 39 by reason of pre-emption.

moved Amendment No. 38:

Leave out Clause 92.

My Lords, Amendment No. 38 and all the other amendments in its line seek to remove Part 3 from the Bill. I spoke at some length on this matter in Committee on 3 May, at cols. 519 to 521 and 530 to 533 of Hansard. My mind has remained unchanged since then, so I need do no more than summarise what I said on that occasion.

There are four reasons why this part should be removed. The first is a drafting reason, the second concerns the lack of a referendum, the third relates to the minimised involvement of your Lordships' House and another place and the fourth concerns the degree of discretion that is transferred from Part 3 to the Secretary of State.

I can deal with the first point very briefly. As I said in the discussion on the first amendment, the structure of Part 3 seems entirely illogical. The natural process is, first, for authority to be delegated by Parliament to the Welsh Assembly to do certain things additional to those that it does at the moment; and, secondly, when it has that general authority, to enact particular measures that conform to the delegated powers.

Your Lordships may think that that is the way in which Part 3 ought to be set out—but not a bit of it. Part 3 starts in Clause 92 with stage two and making Welsh Assembly measures. It then goes back in Clause 94 to the act of delegating the authority to legislate to the Welsh Assembly and, at the end, comes back again to Assembly measures. My minimal requirement is for the Government to go away at this stage and reorder the clauses in Part 3 so that the Bill can make more sense to the electorate. I challenge anyone to understand before they have read it at least three times. It is plain throughout the deliberations in another place that as many interventions were made on the basis of misunderstanding as on the basis of true understanding—and that applies to government Ministers as well as to Back Benchers.

My second reason for removing the part is the absence of a referendum. We have said repeatedly from these Benches that we would be entirely content for Part 4 of the Bill to become operative following a referendum. We would far prefer that Part 4 formed the basis of Welsh devolution than Part 3. Indeed, I would go as far as to say that I would prefer Part 4 to form the basis of Welsh devolution without a referendum than Part 3. I am not very well disposed towards referendums, as I think that they undermine the system of representative democracy in this country. But the fact of the matter is that the powers of the Welsh Assembly were originally devolved following a referendum; and I do not see how a further act of devolution can be undertaken without a further referendum.

These points were well canvassed in another place. Mr Ainger, the Minister in another place, said with complete openness and frankness that the reason why the Government had not contemplated a referendum was that they knew that they were not going to win it. Mr Ainger based his approach to the absence of the need for a referendum with respect to Part 3 on the manifesto; but there is nothing in the manifesto to indicate that Part 3 was in the Government's mind before the election. There was a debate about devolution, but that was entirely limited to the proposals put forward by the commission chaired by the noble Lord, Lord Richard. In short, the absence of a referendum ought to be fatal to Part 3.

Then there is the third issue of parliamentary involvement. We have already looked at that in some detail when considering Amendment No. 36A and I do not wish to say any more about it, as it is a matter on which your Lordships' House has already voted. The fact is that there is no parliamentary involvement in stage two. As for stage one, under the Bill there is the same parliamentary involvement as in the making of any Order in Council. Parliament has a short opportunity to debate, with no opportunity to amend, followed by a take-it-or-leave-it vote. That seems entirely unsatisfactory when one considers the monumental constitutional consequences of what we are doing in Part 3.

The Government to some extent recognised this in another place when they suggested a pre-legislative process involving perhaps both the Welsh Affairs Committee and the Welsh Grand Committee. Mr Ainger foreshadowed the possibility that amendments by these committees would be seriously considered by the Welsh Assembly in considering the final draft of the Order in Council; but at no stage will Parliament have any opportunity to amend the draft Assembly measure for adding to the fields contained in Schedule 5. Moreover, at no stage have the Government given any indication that they might allow Parliament to amend that draft Order in Council. This is wholly unsatisfactory, given the scale of the issues that the Bill confronts.

Finally, the Government's rhetoric suggests that this is a big transfer of powers from one Parliament to another; but that is far from the case, as one sees when one grapples with the detail of the Bill. The real shift in power is from this Parliament to the Executive and the Secretary of State. We have already seen, in the second stage process under Part 3, that the Secretary of State can under Clause 100 intervene to prevent a Welsh Assembly measure, properly passed by the Welsh Assembly under clear delegated authority under Schedule 5, being considered by the Privy Council. As for the first stage devolution, the Secretary of State has wide powers to prevent the draft Order in Council going to Buckingham Palace.

We consider any one of these considerations to be sufficiently powerful to ask the House to excise Part 3 from the Bill. In our view, all four of them make out of a case of the greatest cogency. I beg to move.

My Lords, I am sure that it will not surprise the noble Lord, Lord Kingsland, to hear that we on these Benches do not support him on this series of amendments. However, he said some interesting things, which I may comment on.

The noble Lord referred to Mr Nick Ainger saying that a referendum would be lost, but I do not think that it would be. Since the Assembly has come into being, the fears that were expressed at the time of the referendum, of south Wales being dominated by Welsh-speaking people in the north and north Wales—particularly my part of north Wales—being dominated by people in the south, have disappeared. The step has been taken; the Assembly is now an accepted part of the life of Wales and, particularly with its new building, is very highly regarded. I think that the real reason why the Government will not have a referendum straight away is that the Labour Party is split on this issue.

One person who campaigned on the 1979 referendum—indeed, he made his name in that campaign—was, as the noble Lord, Lord Elystan-Morgan, will recall very well, the noble Lord, Lord Kinnock, whose absence from the deliberations on the Government of Wales Bill is very noticeable. There are divisions in the Labour Party about the whole concept of devolution. For those of us who campaigned for many years against the Labour Party in Wales for Welsh devolution, it is interesting to see that so many people here now support it who would not have supported it 20 or 30 years ago. The real problem with the referendum is not that it would fail but that the Labour Party would have trouble with it. For that reason, it was interesting to hear the noble Lord, Lord Kingsland, say that he would prefer Part 4 to come into effect straight away, without a referendum. Well, that is new—I do not believe that I have heard the Conservative Party say that before.

My Lords, it is not new; I said it in Committee, too. It is a much better structured form of devolution than Part 3.

My Lords, we very much welcome that. I am sure that it was said before, but I must have missed that part of the debate on the Bill. I welcome hearing that and no doubt we can have some collaboration on this point in the future.

My Lords, I have listened with particular interest to what has just been said by the noble Lord, Lord Thomas of Gresford. I have always understood the Liberal Democrats' position on referendums and, as my noble friend Lord Kingsland said, one can also understand the general objection to referendums. There seems to have been an increase in confidence on the part of the noble Lord, Lord Thomas of Gresford, as the Bill has proceeded. On earlier occasions, he indicated his reluctance to move on to the Part 4 option because of anxiety about his ability to win a referendum. I would like to refer to this act of confidence in a moment, in the context of some observations made during our proceedings by the noble Lord, Lord Elystan-Morgan.

One of our difficulties with a Bill of this kind is that, although the grouping of amendments has been perfectly proper, it makes it quite difficult to debate in their proper relationship two crucial parts of the Bill—Part 3 and Part 4. We found that in Committee, when we got on to Part 4 only late in the evening, after the dinner break. Today, we will again get on to Part 4 fairly late in the evening. Yet the two parts are intimately related. The noble Lord, Lord Elystan-Morgan, said on Second Reading:

"I consider Part 4 to be the heart, core and kernel of the Bill".

He went on to say that Part 3,

"is a transitory bridge that enables the whole question of Part 4 to be approached".—[Hansard, 22/3/06; cols. 278-9.]

I have made it perfectly clear that, like my noble friend Lord Kingsland, I intensely dislike Part 3 and infinitely prefer Part 4. The noble Lord, Lord Elystan-Morgan, probably does, too—he would like to go to what he described earlier as Gladstonian home rule.

I have a certain amount of sympathy with the noble Lord's lack of confidence in his ability to persuade the Welsh electorate that his views are right; I understand perfectly well that, with his experience, he has these doubts. He spoke with considerable force on Second Reading and in Committee about the bruising experience of having led the yes campaign in 1979, when he failed to convince the electorate in a single county in Wales. His parliamentary experience has been pretty bruising, too. He fought four elections as the Plaid Cymru candidate and did not win them. Then, wrapped in the embrace of the Labour Party in the Wilsonian era and warmed by the white heat of the technological revolution and all that kind of thing, he won the Cardigan seat and held it in the 1970 election, when he and I first met. However, there was a shattering blow when in both elections in 1974—when my party was given a bloody nose and the Labour Party was returned to power—he was rejected by the electorate of Cardigan. After the awful blow of losing the referendum, he must have thought that he had found a safe haven in Anglesey when he succeeded to the seat that Cledwyn Hughes—the much missed Lord Cledwyn of Penrhos—had made his own, only to lose it to a young Conservative, Keith Best, who was a Brighton councillor. If I had had such an experience, I might, like the noble Lord, Lord Elystan-Morgan, have withdrawn to another career. He did—

My Lords, I am very sorry to interrupt the noble Lord, Lord Crickhowell, but we are on Report and we must keep to the amendments. Although everything that the noble Lord is telling us about his relationship over the years with the noble Lord, Lord Elystan-Morgan, is interesting, it is not relevant to the amendment that we are discussing.

My Lords, the amendment relates immediately to the relationship: the noble Lord, Lord Elystan-Morgan, and the Government are putting forward Part 3 as an alternative partly because of the total divide within the Welsh Parliamentary Labour Party on the issue, as the noble Lord, Lord Thomas of Gresford, pointed out. Therefore, this Machiavellian device—"device" is the word used by the noble Lord, Lord Richard—was advanced as a solution. That is what we are debating. As has been accepted in almost every part of the House, it is deeply unsatisfactory. In Committee, I quoted the words of the noble Lord, Lord Thomas of Gresford, when he pointed out on a number of occasions the flaws in Part 3, so I need not do so again. In my view, Part 3 is a Machiavellian and unsatisfactory solution.

The point that I was going to make and the reason why it is so relevant, following the points that I have made about the views of the noble Lord, Lord Elystan-Morgan, is that, while I sympathise with his position, I firmly and fundamentally believe that the Welsh people should be allowed a vote to decide whether they want to go down the route to home rule. If they do, I will, as I have made clear, wholly support them in doing so. Indeed, my position is like that of my noble friend on the Front Bench, which is that, if we were not being offered a referendum, I would infinitely prefer that solution to the one that we are being offered in Part 3.

Part 3 is wholly unsatisfactory. It is a dishonest solution. That is why I will be supporting my noble friend on this amendment. One of my reasons for making these points at this stage is the response of the noble Lord, Lord Davies of Coity, to an earlier amendment, in which he tried to argue that because we are against Part 3, we are against devolution. The fact of the matter is that a vote for our amendment is not a vote against devolution; it is a vote in favour of honest devolution. I have faith in the Welsh Assembly and in its decision on when that vote should come. The obstacles that have been erected should not be put in its way. I have total confidence in the decision that will be made when that vote is taken by the Welsh people.

My Lords, I am greatly flattered by the detailed curriculum vitae relating to me that the noble Lord, Lord Crickhowell, has indulged in, although, with the greatest respect to him and to myself, I think that it was the least substantial part of his address.

The real issue here is whether a referendum is necessary. The case put with so much lucidity, force and charm by the noble Lord, Lord Kingsland, is that these are essentially revolutionary, fundamental changes of a constitutional nature that need the arbitrament of the Welsh people by way of a referendum. I do not believe that I do any disservice to the case put by the noble Lord, but I challenge his view that these provisions are of a revolutionary nature.

All that Clause 92 brings about is the capacity of the Welsh Assembly to set in train a process that will create a legislative slot. It is true to say that that legislative slot will be brought about, or not brought about, by an Order in Council. If it is brought about, it will be the product of a long process of joint consultation. Unless there is such understanding between the two bodies—the Cardiff Assembly and the Westminster Parliament—and unless there is trust, integrity and candour, it will all fail. It would be perfectly possible, in theory, to conceive of a situation in which something was sold as being narrow and limited, whereas there was a hidden agenda and all manner of things were being contemplated. If the Welsh Assembly proceeded in that way—and I am utterly confident that it will not—it would deserve to have the whole matter fail and the whole of Part 3 rendered nugatory.

It depends upon trust, reasonableness and joint consultation of a meaningful and chivalrous nature. Once that is done, and the slot has been identified, there is nothing revolutionary in the idea of a series of decisions by the Welsh Assembly. It is not correct, as the noble Lords, Lord Crickhowell and Lord Kingsland, argued, that all slots in Acts of Parliament are filled only by an Order in Council. There is the power for Ministers to make regulations without bringing the matter to this House. Ministers do not lose sleep over that. If it is right for a Minister as an individual to be able to do that, how much more right is it for an assembly such as the Welsh Assembly—a democratically elected body, operating within strict statutory powers—to be able to do that? In those circumstances, it is not necessary to regard this as revolutionary, and no argument that it is necessary for there to be a referendum can properly be mounted on that.

The second reason is one that I put forward in Committee. The Conservative Party has set its face, honourably but determinedly, against referendums all along. That was the situation in 1972, when the European Communities Act was passed. Section 2 of that Act provides:

"All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law and be enforced, allowed and followed accordingly".

I say nothing for or against the European Common Market and the European Union today. But that was undoubtedly the most massive transfer of sovereign power—I see that the noble Lord, Lord Norton, agrees—that ever occurred in the history of the British people. It was the Conservative Party's honourable decision to put this matter to the arbitrament of the British people by way of referendum. Why should it now, with regard to something so puny and limited, maintain that there has to be a referendum on Wales? The Bible puts it this way: why strain at the gnat and yet swallow the camel? That is exactly what the Conservative Party is doing.

My Lords, the noble Lord said earlier in our proceedings that, on Part 4, there should be a referendum, and the Government have given us one. We have a choice between accepting Part 3, with all its imperfections, or moving on to Part 4, which I believe is a satisfactory way forward.

My Lords, the two parts are entirely different: one is a bridge leading to the other. Whereas Part 4 justifies a referendum—which I do not think is wholly necessary—Part 3 certainly does not.

My Lords, I shall be extremely brief, and I mean it. I come from a scientific background. Moses has clearly not come down from the mountain with the tablets on this issue. The noble Lord, Lord Elystan-Morgan, is correct that the matter is not of such an order that we need a referendum on it. In fact, in Wales it is largely regarded as a quarter of a loaf; the balances set out in the clauses and the limitations on the Welsh Assembly, which means that it can do very little, are crumbs from the table.

We believe that the referendum situation is one of controversy. My noble friend pointed out that there are divisions on this in the Labour Party, but all the opinion polls I have seen in the past 12 months are in favour of giving the Welsh Assembly more powers, and primary legislative powers too. It is a point of argument as to whether a referendum would be lost, but this is in Part 4 of the Bill, not Part 3.

The noble Lord, Lord Kingsland, said that there was a shift in power to the Secretary of State. That is correct. We have put down amendments to reduce and eliminate the Secretary of State's overbearing powers. I believe that we need to move on.

My Lords, I recall an exchange at a Labour Party conference in the early 1970s. Michael Foot, with his good liberal, west country, home rule background, said that he was in favour of a measure of home rule. The response from Leo Abse was that you might as well talk about a measure of pregnancy, given the possible dynamics of what was happening.

It is suggested that there be a referendum in respect of Part 3. I accept the argument about the Damascene conversion of the Conservative Party, made by the noble Lord, Lord Elystan-Morgan, but there are practical considerations. If a referendum is to have any validity in its impact, there must be substantial participation. All of us, as politicians, are concerned about the lack of participation, even in Westminster elections. I mentioned earlier the problem we had in the 1997 referendum: in spite of all the major forces in Wales being in favour—with the exception of the Conservative Party—and the Welsh media building up as much of a head of steam as possible, we had 50 per cent participation.

If the major step forward on primary legislation were to be taken, as in Scotland, there could be substantial participation, but even then it would probably be much lower than 50 per cent. How can one seriously expect a sufficient proportion of the Welsh electorate to participate with the relatively minor, step-by-step elements which would result from Part 3? Participation would be derisory and there would be no substantial lesson to draw from it.

I have fears, too, about Part 4, but my fears about Part 3 are much greater.

My Lords, we have had a most interesting debate. Not for the first time on this Bill, scarcely an argument has been advanced today that we did not hear in Committee. I am happy to tell the House that the Government's response to the arguments is exactly the same as it was then.

The amendments are not proposing some minor revision of the Bill; instead, the Opposition are telling the Government, "We know how to do this better. We wish to rewrite the Bill. We will take out Part 3 and implement Part 4". They did not argue for that, of course, at the previous general election. They are prepared to disavow the fact that the Labour Party argued for enhanced powers of devolution at the last election, and won a majority. It also won a majority in Wales against the main opposition party. Yet the Opposition, in their mild revising role for which this House is renowned, are prepared to rewrite the Bill on that rather flimsy basis.

One noble Lord on the Front Bench says how much he abhors aspects of referendums. Then the noble Lord, Lord Crickhowell, emphasises, equally fluently, how he has suddenly discovered an enormous affection for a referendum, which should take place on Part 4 forthwith. That does not sound like a House in its best revising mood; it sounds like a House bent upon wrecking the crucial part of the Bill.

Part 3 is designed to ensure that the Assembly has the tools it needs to do the job and to deliver the right policies to the people of Wales. It will give the Assembly control over the detail of legislation while Parliament will decide on a case-by-case basis whether to grant the Assembly new powers, just as it does now. As the noble Lord, Lord Elystan-Morgan, said so accurately, these do not sound like revolutionary powers. This is a mild, evolutionary approach to enhanced powers for the Welsh people; exactly the process we said at the last general election we would pursue.

It is not as if we are not encouraged by the support of the Welsh people. A recent ICM poll showed that 21 per cent of the Welsh people wanted to keep the status quo, while 39 per cent wanted a more powerful Assembly with full law-making powers. At the two extremes, only 20 per cent wanted to abolish the Assembly, and only 16 per cent were in favour of total independence. It seems yet again that the Government have got the pitch of this Bill just about right in terms of opinion in Wales. We intend to move along those lines with Part 3.

If the Opposition had come to the Bill addressing the people of Wales with great clarion calls about how they intended to advance the cause of devolution by immediately moving to Part 4, saying, "The Government are too reserved about these issues, and we'll be giving a referendum immediately to the Welsh people on this matter", and were now proposing these amendments against that kind of background, they might have some credibility. When the position adopted merely sets out to wreck a carefully thought-out Bill with careful stages on how it reaches its objectives—objectives laid down by the Government in the presentation to the Welsh people before the last general election—the amendments can only be rejected.

My Lords, in the Government's manifesto before the last election there was not an iota of warning that foreshadowed Part 3, nor was there any discussion of any of the issues or structure contained in it. To the extent that there was any debate, it was solely on the decisions made by the commission of the noble Lord, Lord Richard.

I say to the noble Lord, Lord Elystan-Morgan, that the only reason we are supporting a devolution of further powers to the Welsh Assembly is that the initial devolution in 1998 was authorised by the referendum. That being so, it seems to us wholly wrong not to adopt exactly the same procedure again.

My noble friend Lord Crickhowell—

My Lords, I fail to see how there can be real validity to that argument. The devolution that occurred prior to the setting up of the Welsh Assembly in 1998 was not one piece of devolution but a long series of acts of devolution, amounting to some 600 or 700 individual items, over the period of 1964 to 1998. There have been some instances of piecemeal devolution ever since, and I am sure the noble Lord, Lord Kingsland is not arguing that there should be a referendum on each occasion.

My Lords, I am extremely sorry to have to interrupt the noble Lord again. We are at Report. Members are allowed to speak once, and not again, unless they wish to elicit a point of information from the person they are addressing their remarks to.

While I am on my feet, may I say we have an enormous amount of work to do on this Bill. At the rate we are going we will be here until about three o'clock in the morning. We must try to stick to the rules of debate at Report, and move on as quickly as we can.

My Lords, I shall resist the temptation to respond to the noble Lord, Lord Elystan-Morgan, and conclude. My noble friend Lord Crickhowell described Part 3 as Machiavellian. Those words have been echoed by the noble Lord, Lord Richard, on the opposing Benches. I said earlier in the day that the formulation of Part 3 was "serpentine". It is certainly devolution by stealth. It is devolution in camouflage; it is devolution by sleight of hand. Above all, as my noble friend Lord Crickhowell, said, it is not honest devolution. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 38) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 144.

Resolved in the negative, and amendment disagreed to accordingly.

moved Amendment No. 39:

After Clause 92, insert the following new clause—

"REFERENDUM ABOUT COMMENCEMENT OF ASSEMBLY MEASURES PROVISIONS

(1) Her Majesty may by Order in Council cause a referendum to be held throughout Wales about whether the Assembly Measure provisions should come into force.

(2) If the majority of voters in a referendum held by virtue of subsection (1) vote in favour of the Assembly Measure provisions coming into force, the Assembly Measure provisions are to come into force in accordance with section 92.

(3) But if they do not, that does not prevent the making of a subsequent Order in Council under subsection (1).

(4) No recommendation is to be made to Her Majesty in Council to make an Order in Council under subsection (1) unless a draft of the statutory instrument containing the Order in Council has been laid before, and approved by a resolution of, each House of Parliament and the Assembly.

(5) But subsection (4) is not satisfied unless the resolution of the Assembly is passed on a vote in which the number of Assembly members voting in favour of it is not less than two-thirds of the total number of Assembly seats.

(6) A draft of a statutory instrument containing an order in Council under subsection (1) may not be laid before either House of Parliament, or the Assembly, until the Secretary of State has undertaken such consultation as he considers appropriate.

(7) For further provision about referendums held by virtue of subsection (1), see Schedule 6.

(8) In this Act, "the Assembly Measure provisions" means sections 92 to 101."

My Lords, at long last we come to a new clause which provides for a referendum to take place before the provisions in Part 3 are activated. There is no need for me to remind your Lordships that we have touched on the subject of a referendum in preceding debates. I explained in Committee the reasoning behind the need for a referendum and the consent of the Welsh electors prior to the commencement of Part 3. It is because there is in essence no difference of principle between the powers granted in Part 3 and the potential consequences over time and those granted in Part 4 which the Government acknowledge require a referendum and fresh consent.

I argued in Committee that the difference between the effect of the two parts was quantitative rather than qualitative and I am not alone in that. The noble Lord, Lord Richard, described the procedure in Part 3 as,

"a device to avoid having to come to Westminster to ask for primary powers to be formally devolved".

He went on to say that,

"depending on the way in which the Order in Council procedure is used, it could, in effect, be a concealed grant of almost a direct legislative competence down to Cardiff".

The Father of the House, the right honourable Alan Williams, saw part three as,

"a form of creeping devolution".—[Hansard, Commons, 9/1/06; col. 53.]

He saw its true character as did the Delegated Powers and Regulatory Reform Committee in its 17th report. It drew to the attention of the House,

"the width of the power in Part 3 and that it could, subject to the necessary parliamentary approval, be used to achieve a situation (by filling up the 'fields') which is not really distinguishable from that under Part 4 (for which a referendum is required)".

That is the true position in a nutshell.

So the case for a referendum before the implementation of Part 3 follows automatically from its existence in Part 4 as a requirement and the character of Part 3 in itself as a prelude. I regard it as rock solid. It is not surprising that attempts to undermine it in Committee failed miserably. Noble Lords were distracted from the central issue which is the similarity between Parts 3 and 4 and why the first does not require a referendum while the other does. The main distraction was the wording of the question that might be put in the referendum. A number of useful suggestions were made during our debate; in any case, a similar question arises in the context of a Part 4 referendum, so it is not an insoluble problem as far as the Government are concerned.

The truth is that the Government do not wish for a referendum at this time because they do not think they could win it, as the Secretary of State, Mr Peter Hain, has said more than once. Various ideas have been put forward as to why he said it may have something to do with the current unpopularity of the Government. Other ardent devolutionists have intimated that he is probably right. I am not sure where the Liberal Democrats stand but I know where the noble Lord, Lord Thomas of Gresford, stands, and I am delighted that he stands where he does.

People are not going to admit to themselves for a moment that they may have failed to provide devolution in a form that delivered the goods to the satisfaction of the Welsh people—far from it. But after the passage of this Bill the Welsh people will be governed by a changed system of devolved government of which they have not approved. We believe that, before the new system kicks in, they should be given the opportunity to approve it. We also believe that with all parties united behind the new proposals, there is a fair chance that the electorate will support them.

My Lords, will the noble Lord confirm that if a referendum was called on Part 3 and the Opposition had their way, they would campaign for a no vote?

My Lords, I did not say that at all. As my noble friend Lord Crickhowell and others on our side have said, we would campaign for Part 3. The noble Lord knows that there is to be a referendum under Part 4. As Part 3 is barely a step to Part 4, we think that the referendum should be extended to Part 3. The new clause replicates Clause 102 which, with Schedule 6, provides for a referendum prior to the implementation of Part 4. In the event that the new clause was accepted by the Government, Schedule 6 would have to be technically amended, and if the Government are not prepared to do it, I will do it by Third Reading. I beg to move.

My Lords, I am wary of referendums and of the changed attitude towards them on the part of the Conservative Party. Following my experience of the 1979 and 1997 referendums and of campaigning on the Maastricht referendum in France, I am convinced that the outcome will depend most frequently not on the text but on the context. For example, in 1979 and 1997 it was a question of whether the Government were popular and who was campaigning. As President Mitterrand said, the French always gave an answer to the wrong question in their referendums. I simply repeat that I fear that any referendum on the more limited and, I concede, step-by-step, devolution process would have a very low turnout and would lack credibility.

My Lords, I add to what the noble Lord, Lord Anderson, has just said. The amendment calls for a referendum to be held throughout Wales on whether the Assembly Measures provisions should come into force. We disagree with the amendment as it is our party's policy to hold a referendum only if we wish the Assembly to have tax-varying powers.

My Lords, I am grateful to noble Lords who have taken part in this debate, especially the previous two contributions, which have made my case for me. As noble Lords will recognise, I simply do not agree that the provisions on Assembly Measures represent a fundamental change to the devolution settlement. It follows that I reject Amendment No. 39. It would be unprecedented for a referendum to be held on whether Parliament should adopt a new procedure for legislating on certain issues.

The first question that any intelligent voter would ask would be, what are the issues? You would need to define them. It would be a most eccentric referendum. No one could promise that any matters would be devolved to the Assembly if there were a yes vote. It would remain, as now, a matter for this Parliament to decide. So what would be achieved by the referendum except great confusion in the Welsh electorate's mind? I noticed that the noble Lord, Lord Roberts, brushed that point aside. He said that on the previous occasion we spent rather too much time on the wording of the question. I shall not spend much time making that argument today, but it is obvious that if it is well-nigh impossible to phrase the question, how on earth can you hold a referendum on an issue? It is impossible to phrase the question. That is why every attempt that has been made by those in favour of this unacceptable proposal has floundered on the basis that they were inadequate.

As my noble friend Lord Anderson said, the step-by-step process would lack credibility in a referendum campaign. The noble Lord, Lord Roberts, committed himself and the Conservative Party, if Part 4 were implemented and a referendum were necessary, to giving strong campaigning support. We note that point, but we do not think that the amendment would do anything other than cause great consternation in Wales and would not lead to an effective deliberation on how devolution should develop.

My Lords, I am grateful to noble Lords who participated in the debate and who sought to deal with the referendum issue. Like others who have spoken, I have no particular love of referendums but the Government have introduced a referendum in Part 4. I remind the Minister that the question which is to be put before Part 4 is implemented refers to the detail of the Assembly Act provisions and numbers the sections that are to be the subject of a referendum under Part 4, when such a referendum takes place, if ever. The remoteness of that referendum makes one doubt very much whether the Government ever intend to hold it.

My Lords, I apologise because I am slightly confused by the response to my question. This is a referendum about Part 3. If a referendum on Part 3 were established, would the noble Lord campaign for or against?

My Lords, I would campaign for it, depending on how we had framed the question. But I and my party have already said that there is no question of this party being against devolution. We are for devolution, provided it is done in a proper way that is acceptable to the people of Wales.

The noble Lord, Lord Anderson, spoke about the dangers of a low turnout. He will remember the 1997 referendum, which led to the Assembly, and he will be aware of the turnout figures then. There were 25 per cent in favour, 25 per cent against and the majority was 0.6 per cent. Nevertheless, the Labour Party has not abandoned faith in referendums as such and is proposing yet another in Part 4. As an opposition, we have no option but to go along with it and propose that if a referendum is required for the implementation of Part 4, then it is required for the implementation of Part 3. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 93 [Legislative competence]:

moved Amendment No. 39A:

Page 51, line 28, leave out subsection (7).

My Lords, this amendment seeks to remove from the Bill Clause 93(7), which reads:

"For the purposes of this section the question whether a provision of an Assembly Measure relates to one or more of the matters specified in Part 1 of Schedule 5 is to be determined by reference to the purpose of the provision, having regard . . . to its effect in all the circumstances".

In Committee, I asked the Minister what the subsection adds to the existing rules on interpretation practised by the High Court. I went on to suggest that the appropriate rule was to look at the meaning of the text. If that was clear, that was that. If the text was ambiguous, the court should go on to make a purposive interpretation. That approach was shared by the noble Lord, Lord Elystan-Morgan, at col. 1150 of Hansard of 6 June 2006.

I had not intended to return to this matter until I received a letter from the noble Lord, Lord Evans of Temple Guiting, seeking to set out what he regarded as the Government's interpretation of this provision. I would like, if I may, to read out an excerpt. On page two, he states:

"The Government's view, therefore, is that the safest way of achieving that aim is to include in the Bill a statutory interpretation provision leaving no room for doubt as to how the matter is to be dealt with".

Your Lordships will recall here that we are talking about the relationship between an Assembly Measure and the field or matter under Schedule 5 which authorises it. The letter continues:

"To determine whether a provision of an Assembly Measure relates to a matter that is specified in Part 1 of Schedule 5 to the Bill in respect of which the Assembly has legislative competence the courts will be required to consider the purpose of the provision, what it is about, its true nature, its pith and substance".

I ought to interject to say that I particularly liked that expression. I shall continue to quote:

"In doing so the courts will have the greatest flexibility to look outside the enacted words . . . because the court will be required to have regard to 'amongst other things' the effect of the provision in 'all the circumstances'".

I just want to be clear about this. I do not understand how the court could, as it were, cut itself loose from the enacted words to examine,

"the effect of the provision in 'all the circumstances'".

Surely all the circumstances that will have to be examined will be suggested by the text of the Bill; and any purposive interpretation must be anchored initially in the words of the Bill. The words outline the scope of the purposive analyses. If the Minister is content to say that that is what the noble Lord, Lord Evans of Temple Guiting, meant, I can happily withdraw my amendment. But if the Minister has some additional thoughts which would take us away from the view that the noble Lord, Lord Elystan-Morgan, and I take, I would like to pursue the matter further. I beg to move.

My Lords, as the House will have been informed, my noble friend Lord Evans wrote a very detailed letter, precise in its content, and including some interesting language, to the noble Lord, Lord Kingsland, which we had hoped assuaged his anxieties and would not give rise to any further representations on this matter. I regret we appear at this stage to have signally failed.

Let me attempt, therefore, to explain why we would like to see this amendment withdrawn and why Clause 93(7) is fair and accurate. The amendment would remove a provision which is intended, as I think the noble Lord recognised, to resolve any doubts about whether any particular element in an Assembly Measure is within the Assembly's legislative competence—as he said, within the "field". It is important to stress that if this were removed, the Assembly could be severely hampered in its ability to make new and innovative legislation, or legislation which cuts across several different subject matters or tackles problems in new ways. It would prevent the Assembly's ability to create good legislation, and at the same time greatly increase the scope for legal argument about whether something was within the Assembly's powers. The Government's view is that the safest way to avoid legal argument is to include in the Bill a statutory interpretative provision, leaving no room for doubt how the matter is to be dealt with. In reaching that view, the Government, ever mindful of learning from experience, adopted the approach taken in Section 29(3) of the Scotland Act 1998.

The Government are committed to ensuring that the approach of the courts to the interpretation of the Assembly's legislative competence is as consistent as possible and that the use of the tried-and-tested provision, which as I said we have seen in the Scotland Act, which is now expressed in Clause 93(7), is the safest and most sensible way of achieving that aim. We had hoped in the letter to the noble Lord to make this point as effectively as we could. He is correct that the interpretation would be based on the exact words in the legislation. I want to give him the assurance that there is no attempt to shy away from precisely that commitment. But we have a formula with the Scotland Act which works in these terms and we think this is the safest way of guaranteeing this position with regard to the Assembly.

My Lords, as the Minister expressed his final view on the role that words would play in Clause 93(7), I noticed the noble Lord, Lord Elystan-Morgan, nodding. I am sufficiently reassured by that signal from the Cross Benches to indicate to the Government that I shall be withdrawing this amendment and will not bring it back at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that the Report stage begin again not before 8.30 pm.

Moved accordingly, and, on Question, Motion agreed to.

My Lords, I wonder whether, with the leave of the House, I could explain that all speakers in the Unstarred Question must stick strictly to their timing or the Minister will be unable to reply at all.